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METHODOLOGY: <br />City of Eugene Systems Development Charges <br />Appendix C <br />Wastewater System Charge Detail <br />1.0 Local (City) Wastewater System <br />1.1 LocaF Wastewater SDC Formula <br />The general methodology used to develop SDCs includes the following four steps: <br />1. Determine value of growth-related capacity <br />2. Define system capacity <br />3. Calculate unit cost of growth-related capacity <br />4. Develop SDC rate schedule <br />Each step is discussed below and related information is displayed in Table 4, page C-4. <br />7.1.1 Step 1 -Determine Value of Growth-Related Capacity <br />(in 1998 dollars --see current values in Table 4, page C-4) <br />In Eugene, as in most communities, a portion of the capacity needed to serve <br />new development will be met through a combination of existing available system <br />capacity, and additional capacity added by planned system improvements. The <br />reimbursement fee is intended to recover the costs associated with the growth- <br />related (or available) capacity in the existing system, and the improvement fee. is <br />based on the. costs of capacity-increasing future improvements needed to meet <br />the demands of growth. <br />Reimbursement Fee <br />Calculation of the reimbursement fee begins with a review of utility fixed asset <br />records to determine the value of the existing local wastewater system. The <br />system value is based on Replacement Cost New which is a method that <br />involves assigning asset values on the basis of what it would cost in current <br />dollars to construct an equivalent set of infrastructure assets subject to current <br />market conditions, regulatory requirements, and technological advances. -The <br />total value of the existing local wastewater system, including gravity lines (net of <br />assessments),. force mains (or pressure lines), and pump stations was estimated <br />to be $96.1 million. Approximately $8:9 million of assets were funded from <br />grants. Like assessments, grant funds are deducted from the system value in <br />the SDC analysis because general system users did not fund these assets. Net <br />of grants, the total value of the existing system is approximately $87:2 million. <br />Because reimbursement fees are intended to recover the value of the system's <br />unused or available capacity, the total equity in the system is split between <br />existing customers and new development based on the estimated proportionate <br />use of capacity. The reimbursement cost basis is equal to the system equity <br />associated with the capacity available to serve new customers. Approximately <br />52% of the existing system is available to meet the demands of new customers. <br />Therefore, the value of available (orgrowth-related) capacity in the existing <br />system is $45.3 million (net of grants). <br />City of Eugene SDC Methodology Wastewater, Page C-1 <br />